This resultant squeeze on the middle-class, and not profligate, irresponsible spending, has led to unprecedented debt levels. In other words, families are going into debt just to pay for their daily lives. (See February Consumer Credit 5.9% Greater than Last Year)
Bob Herbert, author of a recent article on the topic, chides the current President as well as the three leading Presidential candidates, stating that "No one will tackle the crucial issue of employment in a serious way." (Source: Der Spiegel, Sharing the Economic Pain, March 13, 2008)
Surprisingly, one-third of the U.S. population is either below or dangerously near the poverty line. Specifically:
- The US has a population of 300 million. Thirty-seven million, many of them children, live in poverty. Close to 60 million are just one notch above the official poverty line. These near-poor Americans live in households with annual incomes that range from $20,000 to $40,000 for a family of four.
How did this happen?
In the last year alone, real wages decreased .8%. That's because, although wages increased 3.7%, prices increased even more. U.S. wage levels must stay low to keep with wages in foreign countries such as China and India, which have a much lower cost of living. At the same time, the education and skill level of their labor force is increasing. Furthermore, technology and the global spread of English is making it easier to employ foreign workers for many new types of jobs, such as call centers and computer programming. To remain competitive on the global market, U.S. companies must employ these lower cost, skilled employees or lose market share.
At the same time, prices of food and oil are increasing, thanks to a declining dollar and the Clean Energy Act, which encourages production of ethanol. Unfortunately, this has also increased the price of corn, a primary feedstock for beef, leading to higher food prices.
